After leading members of May's government this week contradicted one another regarding Brexit plans, Downing Street has confirmed that May's position, which stated that free movement would end in the spring of 2019, remains set.
May's spokesman was backing comments made by immigration minister Brandon Lewis this weekend after yet more division within the Cabinet.
But the government has moderated its position since the surprise election setback.
David Jones, a former junior minister in the Brexit department, branded Hammond's transition plans "deeply unsafe".
In an interview for German Newspaper Welt am Sonntag in January, he said that with the United Kingdom would like to remain a European style economy but added: "If we are forced to become something different then we will have to become something different". However, within a matter of days, trade secretary Liam Fox hit back at the notion there was any consensus on retaining freedom of movement during a transitional deal.
Cabinet ministers have also sought to play down talks of rifts and factions within Theresa May's top team over the terms of any transitional deal. We've published proposals on citizen's rights.
The comments were markedly different from Hammond's responses in his January interview with German newspaper Welt am Sonntag, which were seen as a thinly veiled threat to use corporate tax as a form of leverage in Brexit negotiations.
May was advocating a clean break with the European Union starting in March 2019, and had even threatened to walk away from exit talks under the mantra that "no deal is better than a bad deal".
Home Secretary Amber Rudd said after March 2019, European Union workers moving to Britain will have to register, at least until a permanent post-Brexit immigration policy is implemented.
Pro-EU Tory MP Sir Nicholas Soames praised the Chancellor, saying: "He has restored discipline to the political infant class who want Brexit at any cost".
'That is neither our plan nor our vision for the future. There will be a registration system for migrants arriving post-March 2019.
Asked about the possibility of extending free movement during a transitional deal of up to three years, Fox said: "If there have been discussions on that, I have not been party to them", Fox told the newspaper.
"I would expect us to remain a country with a social, economic and cultural model that is recognisably European".
A growing number of other ministers have said they agree with the need for a transition period but Johnson - who has advocated a tough approach to the Brexit negotiations - has been silent on the issue recently.